News Column

Arthur T. Demoulas chides Market Basket board

August 11, 2014

By Jim Haddadin, The Telegraph, Nashua, N.H.

Aug. 11--NASHUA -- After another day of failed negotiations, ousted Market Basket CEO Arthur T. Demoulas on Sunday blamed a faction of shareholders led by his rival cousin for the continuing stalemate over the future of the supermarket chain.

Demoulas also called for an end to the public feuding that erupted over the weekend between the company's head honchos, saying through a spokesperson that the matter shouldn't be negotiated in the press.

In a statement issued Sunday evening, a spokesperson said Demoulas is still seeking to purchase the 50.5 percent of the company controlled by shareholders loyal to his cousin, and that Demoulas is willing to pay the asking price those shareholders demanded before the company's finances began to plummet in July.

While the two sides agree on the selling price, Demoulas has been met with counterproposals "laden with onerous terms" that have held up the deal, according to his statement.

On Saturday, shareholders on the opposite side of the table accused Demoulas of negotiating in bad faith, saying they're prepared to sell their majority stake in the company, but Demoulas refuses to agree to terms they deem to be reasonable.

Those shareholders, who are allied with cousin Arthur S. Demoulas, say they offered to provide financing for the deal in the form of an interest-bearing loan secured by collateral.

"We have been advised that it would be irresponsible to make a loan without collateral, interest or a payment schedule, similar to terms that would apply to any traditional bank loan," reads a statement released by the group.

The message followed on the heels of a similar communication Friday from a group of three shareholders calling themselves the "Independent Directors of the Demoulas Board." Those shareholders said they have offered a deal that would allow Arthur T. Demoulas and his entire former management team to return to work while negotiations continue.

A spokesman for Arthur T. Demoulas rejected the proposal, calling it "window dressing" that would allow board members to stabilize the company while they consider selling it to another bidder. He pointed out that the same directors voted in late June to fire Arthur T. Demoulas and ban him from company property.

The board's move ignited a firestorm of unrest among the company's estimated 25,000 employees and prompted thousands of customers to boycott the chain's 71 stores in New Hampshire, Massachusetts and Maine.

"On three separate occasions since that time, including as recently as yesterday, Arthur T. has offered in writing and otherwise to try to bring back his entire management team to work to stabilize the company," reads a statement from Arthur T. Demoulas' spokesperson. "Each offer was rejected. It is disingenuous to issue a press release at 5:30 on a Friday, from the 'Independent Directors' all of whom were appointed by Arthur S. Demoulas' side of the family, announcing that they have invited him to rejoin the company but not as CEO."

In the latest statement Sunday evening, a spokesperson said Arthur T. Demoulas doesn't believe the war of press releases and statements is helpful to resolving the situation. Demoulas hopes that the next round of communications in the press will be an announcement that his offer to buy the company has been accepted, according to his spokesperson.

The upheaval at Market Basket has lasted for five weeks, prompting calls for a resolution from dozens of New England politicians, including Massachusetts Gov. Deval Patrick and New Hampshire Gov. Maggie Hassan.

Hassan pleaded last week for the Demoulas Super Markets Board of Directors to reach a "constructive resolution" to the impasse, which is affecting an estimated 8,000 part-time workers in New Hampshire.

Managers of the company's stores announced last week that part-time workers will no longer be scheduled to work because of plummeting sales since the dispute began. Hassan encouraged part-time workers to seek jobless benefits while they remain off the job.

Market Basket was also put on notice in July by New Hampshire Attorney General Joseph Foster that authorities are monitoring how the predicament is resolved. Foster warned the company to follow all applicable laws if it chooses to terminate any employees.

In New Hampshire, that means paying all wages due to employees who are fired within 72 hours, including any bonuses, earned sick time, holiday or vacation pay and benefit plan contributions.

Jim Haddadin can be reached at 594-6589 or jhaddadin@nashua Also, follow Haddadin on Twitter (@Telegraph_JimH).


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Source: Telegraph (Nashua, NH)

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